Indonesia to lift social, health spending amid COVID-19 curbs

  • Indonesia has seen a wave of virus cases related to the Delta variant
  • COVID-19 emergency restrictions will be introduced from Saturday
  • Restrictions could pose risks to economic recovery – Finance ministers
  • Indonesia approves Moderna vaccine in case of emergency

JAKARTA, July 2 (Reuters) – Indonesia will increase welfare and health care spending in response to a surge in COVID-19 cases and ease the blow to the economy with tougher restrictions due to go into effect this week, it said Finance Minister on Friday.

In battling one of the worst coronavirus outbreaks in Asia, the fourth most populous country in the world has seen record numbers of infections recently, including Thursday when it recorded 24,836 cases and 504 deaths from the respiratory disease.

To curb the fall wave, “emergency” curbs will go into effect Saturday through July 20 and include stricter restrictions on movement and air travel, a ban on dining out and the closure of non-essential offices.

“There is a possibility that the economic outlook may weaken in the third quarter due to mobility restrictions,” Finance Minister Sri Mulyani Indrawati told a streamed press conference, adding that the impact would depend on how long it lasts.

Southeast Asia’s largest economy suffered its first recession in more than two decades due to the pandemic, but Sri Mulyani said a recovery was picking up pace ahead of the new virus outbreak.

The economy grew probably for the first time in over a year in the April-June quarter, and the government had expected 6.5% growth in the third quarter before the curbs were announced.

The highly transmissible Delta variant, which saw cases rise in India in April and May, is spreading in Indonesia, marginalizing hospitals in overcrowded Java.

In the capital Jakarta, some emergency rooms have been relocated to tents in hospital parking lots as an increase in COVID-19 patients strains medical care capacities.

Sri Mulyani said rupiah 126.79 trillion ($ 8.72 billion) of welfare would be provided to help tens of millions of households in the form of cash transfers, electricity discounts and accelerating food aid programs.

Health care spending will also increase 8% to Rs 186 trillion, including to hire more vaccination staff and treat COVID-19 patients, she said.

The government has pledged to step up testing and accelerate its vaccination campaign, which so far has only reached 7.5% of its target of vaccinating 181.5 million people by January.

So far, Indonesia has relied mainly on China’s Sinovac vaccine, but authorities have tried to find other sources.

The Food and Drug Administration launched Moderna Inc. approved for emergencies (MRNA.O) Vaccine before the arrival of four million doses through the COVAX program. Continue reading

The Netherlands will also donate three million doses of vaccines, said Indonesian Foreign Minister Retno Marsudi.

($ 1 = 14,540,0000 rupiah)

Reporting by Gayatri Suroyo, Tabita Diela, Stanley Widianto and Agustinus Beo Da Costa; Editing by Ed Davies

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